RE/MAX OID may widen; Palace ups spreads; NewPage, Federal-Mogul set talk; Autos slide

By Sara Rosenberg

New York, Dec. 4 - RE/MAX International Inc. is expected to give lenders a larger original issue discount than was originally proposed on its term loan, and Palace Entertainment Holdings Inc. raised pricing on its credit facility and is also expected to increase the discount on its term loan.

In other primary news, NewPage Corp. came out with official price talk on its credit facility as the deal was launched to retail investors with a bank meeting during Tuesday's market hours, and Federal-Mogul Corp. released price talk on its ABL revolver as it too held a bank meeting during the session.

Meanwhile, in the secondary, auto names like General Motors Corp., Ford Motor Co. and Visteon Corp. all headed lower on the heels of sales numbers coming out, and LCDX and cash were softer.

RE/MAX International is rumored to have widened the original issue discount on its $265 million five-year senior secured term loan, and it is also speculated that with this change being discussed with lenders, syndication is just about done, according to a market source.

Talk is that the term loan is now being guided at a discount that is in the 92 area, as opposed to at 99, the source said, adding that nothing firm on the discount level has been announced as of yet.

Pricing on the term loan is still being talked at Libor plus 350 basis points.

Citigroup is the lead bank on the deal, which will be used to refinance $260 million in funded term loan debt that was used to finance the acquisitions of RE/MAX of California and Hawaii and RE/MAX of Carolina and Florida.

The debt that is being refinanced was obtained earlier this year and consists of a $145 million eight-month funded term loan B and a $155 million eight-month delayed-draw term loan (not fully funded) that are both priced at Libor plus 175 bps. The delayed-draw term loan has a 50 bps undrawn fee.

RE/MAX is a Denver-based real estate company.

Palace Entertainment flexes up

Palace Entertainment increased pricing on its $146.5 million credit facility, and talk is that the original issue discount on the term loan B may come wider than the 99¼ level that was originally proposed, according to a market source.

The $45 million revolver and a $101.5 million term loan B are now both being talked at Libor plus 400 bps, up from initial talk at launch of Libor plus 375 bps, the source said.

Merrill Lynch Capital and Bank of Ireland are the lead banks on the deal, which will be used to help fund Parques Reunidos' acquisition of the company.

Palace Entertainment is a Newport Beach, Calif., operator of water parks and family entertainment centers. Parques Reunidos is a Madrid-based amusement-park company owned by equity firm Candover.

NewPage price talk

NewPage held a bank meeting on Tuesday to kick off the retail syndication of its proposed $2.1 billion credit facility, and in connection with the launch, official price talk on the term loan was announced, according to a market source.

The $1.6 billion term loan due 2014 was launched to investors with price talk of Libor plus 375 bps and an original issue discount in the 96 to 97 area.

The term loan had been rumored to be attracting market attention prior to the launch as a result of the bridge being syndicated. In fact, back in October, it was heard that the loan was subscribed at pricing of Libor plus 375 bps and a discount of 99 - although that was never the official talk on the deal.

NewPage's credit facility also includes a $500 million ABL revolver due 2012.

Goldman Sachs is the lead bank on the deal.

Proceeds from the credit facility, along with a $456 million add-on to the company's 10% second-lien senior secured notes due 2012, will be used to refinance existing bank debt and to help fund the acquisition of Stora Enso North America, a paper manufacturing business, from Stora Enso Oyj.

NewPage is buying Stora Enso North America for $1.5 billion in cash, a $200 million super holdco payment-in-kind note that NewPage will issue to Stora Enso and a 19.9% equity interest in the combined company.

Pro forma for the 12 months ended Sept. 30, the ratio of total debt to consolidated adjusted EBITDA is 6.0 times and the ratio of consolidated adjusted EBITDA to cash interest expense is 1.7 times.

NewPage is a Miamisburg, Ohio, producer of coated papers.

Federal-Mogul ABL guidance

Another deal to launch on Tuesday was Federal-Mogul, although it only began syndication on its $540 million six-year ABL revolver while leaving timing on its term loan debt as still to be determined, according to a market source.

And, in connection with the launch of the ABL revolver, price talk of Libor plus 175 bps was announced on the tranche, the source said.

Citigroup and JPMorgan are the lead banks on the deal.

The company's $3.5 billion exit financing credit facility also includes a $1.96 billion seven-year senior secured term loan B and a $1 billion eight-year senior secured term loan C.

Of the total term loan amount, $878 million will be drawn at close, including $50 million that will be used to fund a letter-of-credit sub-facility cash collateral account, and the remaining commitments will be structured as a delayed-draw component available in up to three draws within sixty days of closing.

Official pricing on the term loans is unavailable; however, according to court documents, pricing on the debt can range from Libor plus 137.5 bps to Libor plus 175 bps, depending on ratings. But, the court documents also had the ABL revolver pricing listed as Libor plus 150 bps.

Proceeds will be used to repay the company's existing debtor-in-possession financing facility, to pay any obligations under the plan of reorganization and U.K. company voluntary arrangements, for working capital and for other general corporate purposes.

In addition, upon exit, some of the company's pre-petition debt will be exchanged for "Pre-Petition Take-Back Paper," comprised of a $1.328 billion term loan A and $305 million of junior secured PIK notes.

If drawn, the proceeds of the delayed-draw term loan debt will be used to refinance the company's secured term loan and its junior secured PIK notes.

Federal-Mogul is a Southfield, Mich.-based auto parts manufacturer.

Autos trade down

Moving to trading happenings, the auto sector in general came under some pressure on Tuesday as investors continued to react to November sales numbers, according to a trader.

General Motors, a Detroit-based developer, producer and marketer of cars, trucks and parts, saw its term loan end the day at 93 bid, 94 offered, down from 93¾ bid, 94¾ offered on Monday, the trader said.

Ford, a Dearborn, Mich.-based automaker, also saw its term loan end the day at 93 bid, 94 offered, down from 93¾ bid, 94¾ offered, the trader continued.

Visteon, a Van Buren Township, Mich.-based automotive parts supplier, saw its term loan end the day at 92½ bid, 93½ offered, down from 93 bid, 94 offered, the trader added.

On Monday, General Motors announced that its November sales were down 11% compared to last year at 263,654 vehicles, reflecting continuing reductions in daily rental sales and softening industry demand.

For General Motors, the downturn came after three consecutive monthly increases.

Ford, on the other hand, announced on Monday that its November sales were up 0.4% versus a year ago at 182,951 due to continued growth in crossover sales and increased demand for hybrids, fuel-efficient cars and its industry-exclusive SYNC in-car connectivity technology.

For Ford, November marked the first sales increase following 12 months of declines.

LCDX, cash lose ground

LCDX 9 and the cash market in general were both weaker during the session, with cash coming in by about an eighth to a quarter of a point, according to traders.

The index went out at 96.30 bid, 96.40 offered, down from 96.50 bid, 96.65 offered, traders remarked.

Some examples of names that were active at lower levels on Tuesday included Alltel Communications Inc. and Texas Competitive Electric Holdings Co. LLC (TXU).

Alltel, a Little Rock, Ark., provider of wireless voice and data communications services, saw its term loan B-3 end the day at 95¾ bid, 96 offered, down from 95 7/8 bid, 96 1/8 offered, one trader said.

And, Texas Competitive, a Dallas-based energy company, saw its term loan B-2 and term loan B-3 close the day at 98 bid, 98¼ offered, down from 98 1/8 bid, 98 3/8 offered, the trader added.

The stock market was also down on Tuesday, with Nasdaq losing 17.30 points, or 0.66%, Dow Jones Industrial Average losing 65.84 points, or 0.49%, S&P 500 losing 9.63 points, or 0.65%, and NYSE losing 63.48 points, or 0.65%.

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